Lessons Learned From Hard Times – A Gift

The first stretch of truly hard times I faced as a real estate investment brokerage owner began in late 1979. It was akin to enjoying a lazy float down the river on a warm summer day, beer in hand, only to suddenly find yourself in the spin cycle of a rapids you never knew was there. I’ve had buddies, years later, describe the early-mid 1980’s as what used to be known as an ‘E-Ticket Ride’. Back in the day, the best rides at Disneyland required an ‘E’ ticket. I’m here to say that those years were a lotta things, but fun wasn’t one of ’em.

In a word, it was brutal. Much worse than today, in my view.

For those of you who’re under 50, and wondering how today’s hard times compare, it’s my opinion this chapter in the book of Hard Times is in many ways, not as tough as it was back then. I’ll elaborate.

All you investors, long and short term? If you couldn’t buy property with cash in the first few years of the 80’s, you were restricted to the small slice of the real estate market offering seller financing. Think 50 dogs goin’ after one bone and you’ll have the right idea. The use of Land Contracts, AITDs, and takin’ title ‘subject to’ proliferated. Due to that last one, many fortunes in the making were lost, as interest rates forced lenders to demonstrate their overwhelming power in the market. ‘Subject to’ quickly became a phrase one didn’t utter in church or in front of Grandma. It was Christians vs Lions — no exaggeration. But that’s a different post altogether. Suffice to say, it appears history will be repeating itself, and sooner rather than later on that front.

By late 1980 interest rates were completely outa hand. As 1981 bullied its way onto the stage, rates were well into the teens. Guess how much real estate was being sold or exchanged at that point? By then, there weren’t 50 dogs left for every bone out there. That’s how truly hard the times were. Those of us who’d learned various exchange strategies, combined with seller financing structures that’d make your head swim, made enough to stay in business by the skin of our teeth. Life back then was one step forward, 10 steps back, and a lotta prayer.

I learned more about morphing what I’d learned into effective execution in those few years, than in any decade since. It’s not even close. I wouldn’t give those years back for anything. I hated it while the spin cycle was in at full speed, not knowing up from down. But in hindsight it was a priceless time. A years long learning lab. Much of what I use today came from those pressure packed years.

So now, when I watch the talkin’ heads on TV talk about this being the worst down-cycle since the depression, I smile. Not even in the same league. Sure, there are factors now that weren’t in play back then. But there were also factors in play then, that aren’t part of the equation now. Potentially, this one could spiral out of control — just like it could’ve back then.

The lessons

Hard times force us to learn — to adapt. But most importantly, to think like never before. We learn much about ourselves, and who we really are. I know there were those who bloomed back in the 80’s fiasco, forged in the heat of nearly impossible economic times.

We adapted or we left the industry. Learn that lesson or update your resumé.

We learned the difference between acquiring more knowledge and completely mastering every nuance involved. Ask yourself if you could teach what you’ve learned. If there’s a doubt, put in more hours ’til you can. It’s the difference between those who’re good (a dime a dozen), and those who’re bona fide experts — masters of their trade, if you will. For example, I learned that analysis must be married to fierce thought — data digestion to coin a phrase, or it can be, and often is, rendered worthless.

This round of hard times might just be the one propelling you into a new level of expertise and rubber hittin’ the road competence. We throw those words around a lot these days. They’ve lost far too much of their import. The experience you’ll stockpile during these hard times will emerge in the future as pure gold.

The only real loss happens when we don’t turn ourselves into insatiable learning machines when the opportunities to expand our knowledge, expertise, and experience are so evident and accessible.

Hard times, at least in my experience, have been proved to be the gift that never stops giving.

Free eBook from BiggerPockets!

Join BiggerPockets and get The Ultimate Beginner's Guide to Real
Estate Investing for FREE - read by more than 100,000 people -
AND get exclusive real estate investing tips, tricks, and techniques
delivered straight to your inbox twice weekly!

Hey Jason — From where I sit, that’s accurate. However, many of my kids’ friends are struggling big time. This downturn has attributes of a smart bomb. It’s hitting many parts of the populace while leaving many sectors relatively unharmed. The Millennial Generation in San Diego is experiencing 12-15% unemployment. But if they’re in certain job sectors they’re kickin’ butt.

Real estate investors moving equities to the regions now thriving are winning, and will be living significantly enhanced retirements because of it. As Grandma taught us, life isn’t fair.

I like the fact that if you can’t teach something to people and make it very easy for them to learn it, then you definitely don’t understand it enough. It’s good to get real life lessons from a veteran like you Jeff. Thanks

Just reading through your post, it has a great positive lesson to be learned.
Most of us have had to bear the brunt of hardship and yes many have fallen to the way side,
we ourselves have had to look at new avenues to survive. As you say a gift that keeps giving.